Uber says Korean service legal, despite indictment of CEO for illegal taxi operations

Uber CEO Travis Kalanick has been indicted by South Korean authorities for operating an illegal taxi service

Would iconic ride-hailing startup Uber Technologies CEO still be worth its US$40 billion valuation if founder and CEO Travis Kalanick were in prison?

That's a question the company may have to face following reports Wednesday that South Korean prosecutors have indicted Kalanick for flouting local taxi laws.

Uber has raised $1.4 billion this year to expand its ride-hailing operations to new places. Using a mobile app, it puts passengers in 250 cities in contact with drivers for hire, and takes payment for the ride. The vehicles available vary from place to place, and can include "black cars" or limousines, licensed taxis, or private vehicles driven by their owners without a business license.

The company's business model has run into criticism for many reasons, including flouting local taxi laws by allowing limousines to be "hailed" via the app and providing unfair competition to licensed taxi services by using unlicensed drivers. It has also been accused of performing insufficient background checks on drivers following a number of alleged assaults or rapes by Uber drivers. Uber promised to improve driver screening following one such incident in Delhi.

South Korean authorities, like those in many other countries, are taking a hard line against the company's disruptive approach, which has been described as seeking forgiveness rather than permission for the way it operates.

On Wednesday, prosecutors there indicted Kalanick on charges of operating an illegal taxi service, Korean news agency Yonhap reported. The head of local car rental operator MK Korea was also indicted, accused of operating an illegal passenger transport business using the company's cars, the report said. Neither of the two has been detained by authorities. The indictments mean they could face up to two years in prison.

The indictments are the result of an investigation triggered by a complaint from city authorities in the country's capital, Seoul, about the company's unfair competition with local taxi services. On Friday, according to Yonhap, the city's government voted to reward those reporting illegal activities by Uber with a payment of up to 1 million won (US$907).

The company was unperturbed by the indictment, expressing confidence that the Korean court will uphold a fair and sensible judgement on the case. "Uber Technologies respects the Korean legal system and will provide its full cooperation," it said in a statement, adding: "We firmly believe that our service, which connects drivers and riders via an application, is not only legal in Korea, but that it is being welcomed and supported by consumers."

Uber's UberPop service, which puts unlicensed drivers in touch with passengers, faces a total ban in France from Jan. 1, when a new taxi law comes into effect. Spain has already banned UberPop, and a Belgian government minister has said he will file criminal charges against Uber for operating the same service.

A number of U.S. cities are also at loggerheads with the company over its flouting of local taxi ordinances. Last week Uber suspended its service in Portland, Oregon, for three months while it seeks to negotiate a settlement there.

(With additional reporting by Yewon Kang in Seoul.)

Peter Sayer covers general technology breaking news for IDG News Service, with a special interest in open source software and related European intellectual property legislation. Send comments and news tips to Peter at peter_sayer@idg.com.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags internetlegalindustry verticalstransportationInternet-based applications and servicesCriminalUber Technologies

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Father’s Day Gift Guide

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?